Customer Snapshot

Digging Up the Past for Answers to Improve the Future

>200%

ROI expected in five year

Surgutneftegas, one of Russia’s largest oil and gas providers and a long-time SAP customer, is now taking advantage of the insights buried in 15 years’ worth of accumulated data and combining them with up-to-the-moment operational information using the SAP HANA platform.

The areas of benefit are enormous, starting with providing all the necessary materials and technical resources to the right place at the right time throughout the company’s vast enterprise. Couple that with a lower total cost of ownership plus new flexibility to conduct real time analysis that was previously not feasible.

Surgutneftegas has also purchased new solution architecture to address the next five years of
data management—and expects a 200%+ return
on investment.

Company

Surgutneftegas Open Joint Stock Company

Headquarters

Surgut, Russia

Customer Website

Revenue

US$20 billion

Number of Employees

105,000

Implementation Partners

IBM

Line of Business

Information Technology

Industry

Oil & Gas

Featured Products

SAP HANA

History

The company, Open Joint Stock Company “Surgutneftegas”, was founded on “the empty place”, Western Siberia, with origins tracing back to 1964. The Oba river was the only artery connecting Surgut with the outside world as the region had no permanent construction including surfaced roads until the early 1970s. As of today, the Company operates in 16 regions and actively develops three oil and gas provinces – Western Siberia, Eastern Siberia, and Timano-Pechora.

1977Surgutneftegas granted the status of the diversified production association

1993Association was transformed into open joint stock company (OJSC)

2012Surgutneftegas celebrates 35th anniversary

Business Model

Self-sufficient from the well to the tank

An important distinction for Surgutneftegas in the Russian oil and gas industry is its high degree of vertical integration. The company performs practically all steps in energy production and distribution itself – from building rigs and facilities to drilling and transportation. It even develops its own information systems.

Success Strategy

Deliberately innovative

The CIO of Surgutneftegas, Rinat Gimranov, expressed the company’s vision as one of innovation, not only in IT, but also in other areas, such as oil well drilling and technology used for the extraction process — calling it a “deliberate approach of executive management.”

The Challenge

The challenge of big data

Over several years, Surgetneftegas has encountered problems related to the processing of business information. One of the most important applications of the data analysis was to ensure the availability of more than 140,000 specific material types over seven time zones, requiring 800,000 material movements. This contributed tens of millions of new records to the data warehouse each year, making analysis so difficult it threatened to slow down business, particularly as the necessary information was housed in two different systems.

Enter SAP

Appeal of in-memory capabilites

The company CIO knew of SAP HANA in-memory capabilities, and felt that it would best suit their goal of speedy data analyis. HANA is a single solution for data analysis, not only speeding up the results by combining operational information and the data warehouse, but offering an environment capable of delivering the answers they needed in a matter of seconds.

This solution would increase employee productivity with speedier reporting, ease of use, and infrastructure simplicification.

The SAP Experience

Spirit of partnership

SAP originally performed a proof of concept pilot, setting 3 goals:

1

Receive actual real-time

data every 1-2 hours

during the day.

2

Save data for analysis to

SAP Netweaver BW one

week at a time.

3

Store data at one closing

period with a cutoff time

for analysis.

Even more importantly

The most important success factor was team cooperation through the innovation hub, and collaboration between team experts and SAP development, who spent four weeks together. This spirit of partnership allowed SAP and Surgutneftegas to work through the challenges with minimal disruption.

Better Business

Answers at the speed of HANA

SAP HANA is an in-memory solution that was the right fit for this customer, offering a simplified infrastructure that saved millions of dollars in IT costs. For instance, the data analysis of millions of data records located in a 230GB data warehouse is now 72 times faster, while reporting the movement of a single material was reduced from 8 hours to 5 seconds.

Benefits

Better and new types of analysis achieved

Because it generates reports in seconds that until now have been taking minutes – or hours – to produce, Surgutneftegas is experiencing immediate benefits. Executives and operational managers understand they need to make better informed decisions faster. They have richer information to work with, including much more granular results from existing forms of analysis, as well as new types of evaluation never before possible. In materials and supply chain management, this translates into the much more timely and accurate delivery of resources where they are needed.

“Month-end financial closing is a cumbersome process that now takes several days. With SAP HANA, we could close every day if we wanted to.”

“For financial reporting on materials we consume, for example, SAP HANA delivers results that would otherwise consume 4% of the productivity of our production systems. That is worth millions of dollars right there.”

Lessons Learned

In-memory is the future now

Results from the SAP HANA installation have impressed Surgutneftegas management. “Traditional ways of building analytics systems are on the decline. The in-memory approach is more effective and produces superior results.”

Run Simple

Plans for new business analysis

The new SAP HANA installation is now in production and the company is planning all new analysis across every facet of the organization.